Is Amazon FBA Worth It? Pros and Cons
Power Digital is a full-service growth marketing agency helping brands accelerate their revenue with data, strategy, and execution. Known for our award-winning teams and nova technology, we bring clarity to complexity and build marketing that scales.
- 1. What Is Amazon FBA?
- 2. Pros of Amazon FBA
- 3. Cons of Amazon FBA
- 4. Understand the Full Cost of Amazon FBA
- 5. FBA and Your Brand: Convenience vs. Control
- 6. How to Join Amazon FBA
- 7. Alternatives to Amazon FBA
- 8. Operational Fit
- 9. Inventory & Storage
- 10. Cost and Scalability
- 11. Leverage Amazon’s Resources and PDM
If you’re trying to pivot your business to e-commerce, you may be interested in Amazon’s FBA service.
The benefits of e-commerce are significant: NBC News found that in 2020, many businesses were forced to transition to online marketplaces due to the pandemic. In this case, these businesses were able to sustain their sales and even break records.1
Still, the logistical stress of e-commerce can dissuade many business owners.
That’s where Amazon’s Fulfillment by Amazon (FBA) comes in. By handling the entire fulfillment process, FBA is an Amazon marketing strategy that allows businesses to focus less on logistics and more on what they do best: crafting their products. Read on for a breakdown of the program, the benefits of Amazon FBA, and its alternatives.
What Is Amazon FBA?
The fulfillment process begins when a customer clicks “Check Out” and continues until they get their order, or send in a return or exchange. The basic steps to the fulfillment process are as follows:
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Warehousing/inventory storage
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Packing orders
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Shipping orders
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Processing returns or exchanges
Amazon FBA is the Fulfillment by Amazon program. Businesses send their products to an Amazon fulfillment center. There, Amazon takes care of the:
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Picking
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Packing
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Shipping
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Amazon FBA even covers the customer service, returns, and exchanges for these Amazon orders. How much does this comprehensive service cost? Businesses can gain access to this program for $39.99 per month, in addition to selling fees.
Pros of Amazon FBA
The benefits of Amazon FBA are immediately obvious, especially if your fulfillment infrastructure is small or nonexistent. We’ve also outlined a few additional advantages that you might not be aware of:
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Access Amazon Prime – Businesses who use Amazon FBA are eligible for Amazon Prime shipping, which means that Prime customers are more likely to click “order” on your Amazon product.
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Utilize “The Buy Box” – On a product listing, Amazon includes other sellers within what they call “The Buy Box.” An Amazon FBA seller is more likely to gain this real estate than sellers who do their own fulfillment.
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Support multi-channel fulfillment – Amazon FBA also supports fulfillment for orders that are not sold through Amazon Marketplace, allowing you to support your business’s multiple sales channels.
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Join the winning team – Amazon is by far a prominent force in e-commerce. By utilizing Amazon FBA, you can benefit from Amazon rather than trying and failing to compete.5
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Decrease shipping costs – No one understands scales like Amazon. With FBA, you can benefit from Amazon’s enormous size and ability to drive down shipping rates in a way only a large corporation can.
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Expedite shipping – By the same principle, Amazon can offer your business much faster shipping without significant added costs.
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Include customer service – FBA takes care of customer service and communication and even returns and exchanges, decreasing your own labor requirements.
Cons of Amazon FBA
Despite these many advantages, Amazon FBA still has its drawbacks, including:
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Increased returns – Amazon prioritizes customer experience, touting their “easy returns process.” As a result, you might see an increase in your return rate.
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Additional shipments – You will still need to package, label, and ship your products to an Amazon Warehouse and use their ASIN/UPC barcode system, which may be inconvenient to some small business owners.
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High cost – In addition to the monthly fee, you also have to pay Amazon to store your inventory. If you’re new to inventory management and your products aren’t selling, these fees might become painful as your products sit in Amazon warehouses.4 For some businesses, these fees also begin to cut into their profit margins, forcing them to leave Amazon.
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Seller theft – Amazon has a problem with copycat sellers who will list their own counterfeit products under your item number. Peter Denbigh of the Watch Ya’ Mouth game dealt with this disadvantage firsthand, suffering from low customer reviews from counterfeit products and lost sales as a result.
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No direct customer relationship – Although it’s convenient that Amazon manages customer service for FBA users, that means that you can’t actively target these customers in the future because Amazon maintains their information. At the end of the day, your company still needs to be the one to prioritize customer satisfaction and build customer relationships.
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Uncertainty – Some sellers report difficulty communicating with Amazon, especially when problems occur, such as broken or lost items. For example, if you don’t follow Amazon’s policies, your profile can be shut down completely, and you may be unable to appeal for a reboot
Understand the Full Cost of Amazon FBA
Amazon FBA offers convenience and scale, but its full cost structure goes beyond the base monthly fee. Over time, fulfillment, storage, and return-related costs can reduce your margins if not properly accounted for.
Fulfillment Fees
FBA charges a per-unit fee based on size and weight, covering picking, packing, and shipping. As of 2025:
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Standard-size items: $3.06–$6.92 per unit
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Oversize items: ~$9.61 or more depending on weight tier
These fees can quickly add up, especially for heavy or low-margin products.
Storage and Long-Term Fees
Monthly storage is charged by cubic foot:
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January–September: ~$0.78
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October–December: ~$2.40
Inventory stored over 181 days incurs aged inventory surcharges, making sell-through rate and forecasting critical.
Returns and Extra Service Charges
Amazon’s generous return policy can lead to higher return rates. Additional costs may include:
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Return processing fees
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Removal or disposal fees
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Fees for incorrectly labeled or packaged products
Factoring in these costs upfront helps you make more informed pricing and fulfillment decisions.
FBA and Your Brand: Convenience vs. Control
While FBA provides trusted fulfillment and wider reach, it also limits how much control you have over your brand and customer relationships.
Limited Packaging and Brand Experience
FBA uses Amazon-branded packaging, which means you can’t include custom inserts, branded boxes, or other personal touches. This limits your ability to create a memorable unboxing experience—especially important for direct-to-consumer and private label brands aiming to build long-term loyalty.
No Direct Access to Customer Data
With FBA, Amazon manages customer service and retains customer information. You won’t have access to emails or phone numbers, which makes it difficult to:
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Run email marketing campaigns
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Collect direct feedback
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Build long-term customer relationships
For brands focused on retention or cross-channel marketing, this lack of access can be a significant limitation.
Elevate customer experiences with personalized strategies that foster long-term loyalty.
How to Join Amazon FBA
If you’re ready to join Amazon FBA, here are 10 simple steps:
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Register for an Amazon seller account for your business.
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Navigate to Amazon Seller Central.
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Set up FBA through Amazon Seller Central.
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Create listings for your products.
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Add your product listings to the Amazon catalog.
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Specify that your products are FBA inventory.
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Prepare your products using the Amazon packing guidelines, shipping, and routing requirements.
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Create your shipping plan.
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Print Amazon shipment labels for your products.
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Ship your inventory to Amazon fulfillment centers.
Alternatives to Amazon FBA
It’s important to remember that fulfillment by Amazon isn’t your only option. Amazon FBA is best for companies that want to save time and scale their business while still being eligible for Amazon Prime.
If your business doesn’t fall into these categories or if you’re still unsure about Amazon FBA, we’ll cover your other options below.
In-House Fulfillment
With in-house fulfillment, you take care of storing and shipping your orders from your business location or a secondary warehouse. This option is best for businesses who:
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Ship at a low volume
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Have their own logistical network
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Have complex packing or shipping requirements
However, in-house fulfillment has some key disadvantages because it:
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Restricts the variety of products you can sell
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Restricts the number of products you can sell
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Increases overhead expenses in some cases
Many businesses start out with in-house fulfillment and as their business grows, transition to third-party fulfillment such as Amazon FBA.
Third-Party Fulfillment
Amazon FBA is a third-party fulfillment program, but it is not the only option. It’s best to shop around to find which third-party fulfillment can offer you both the best rates and services. Whether you choose Amazon FBA or another company, here are the questions to ask yourself as you make your decision:
Operational Fit
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Do you have complex packaging, kitting, or custom shipping needs that FBA can’t accommodate?
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Are your products large, fragile, or regulated in ways that make fulfillment more complicated?
Sales Volume & Channels
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Are you selling on multiple platforms (Shopify, eBay, DTC)? If so, does your fulfillment partner support multichannel integration?
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How many orders are you fulfilling monthly, and are you growing quickly?
Inventory & Storage
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Do you need specialized storage (e.g., temperature control, distributed warehousing)?
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How accurately can you track inventory across platforms and locations?
Customer Experience & Returns
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Do you want to manage your own customer service, or outsource it?
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Do you need to control the returns process more closely than Amazon allows?
Cost and Scalability
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Have you compared the total cost of FBA vs. a 3PL (including storage, pick & pack, customer service)?
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Is your current solution scalable as your business expands regionally or internationally?
Leverage Amazon’s Resources and PDM
So is Amazon FBA worth it? Leverage the pros and cons of Amazon FBA.
If you don’t already have fulfillment infrastructure and if you are interested in rapidly scaling your business and increasing your sales, then yes. For other businesses, Amazon FBA might not be right because the cost-benefit analysis doesn’t add up or because the direct customer relationship is essential.
To further scale your business and increase your sales, enlist our digital marketing agency, Power Digital Marketing. We provide your business with a digital marketing strategy to elevate your brand and optimize your growth plan.
Reach out today to learn more about other Amazon features including Amazon marketing cloud, what is AWS, what’s the Amazon Affiliate Program, and what is Amazon Explore.
Sources:
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NBC News. Small businesses who pivoted to e-commerce saw record sales during Black Friday weekend. https://www.nbcnews.com/business/business-news/smalthate-commercel-businesses-who-pivoted-e-commerce-saw-record-sales-during-n1249499
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Amazon. The Ecommerce Fulfillment Guide to Grow Your Business. https://sell.amazon.com/learn/ecommerce-fulfillment?ref_=sdus_fba_ecommf_what_h1
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Amazon. Fulfillment by Amazon. https://sell.amazon.com/fulfillment-by-amazon.html
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Intuit Quickbooks. Pros and cons of FBA (Fulfillment by Amazon). https://www.tradegecko.com/blog/ecommerce-tools/pros-and-cons-of-fba-fulfillment-by-amazon
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Forbes. Thinking Of Selling On Amazon Marketplace? Here Are The Pros And Cons. https://www.forbes.com/sites/pamdanziger/2018/04/27/pros-and-cons-of-amazon-marketplace-for-small-and-mid-sized-businesses/?sh=240fc3b76867
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Big Commerce. Leveraging Amazon FBA for Your Online Sales Success. https://www.bigcommerce.com/blog/amazon-fba/#the-pros-and-cons-of-fba
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Amazon. Common ecommerce fulfillment options. https://sell.amazon.com/learn/ecommerce-fulfillment?ref_=sdus_fba_ecommf_what_h1#three-fulfillment-options
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Amazon. Checklist: What factors should you consider when scaling fulfillment? https://sell.amazon.com/learn/ecommerce-fulfillment?ref_=sdus_fba_ecommf_what_h1#scaling-fulfillment
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Power Digital is a full-service growth marketing agency helping brands accelerate their revenue with data, strategy, and execution. Known for our award-winning teams and nova technology, we bring clarity to complexity and build marketing that scales.
